The Ministry of Transportation and Communications (MOTC) yesterday said that it had proposed two ways to raise funds for Taiwan High Speed Rail Corp (THSRC) after it reduces the original investors’ capital to erase the firm’s debts, adding that the preferable option would be to increase the shares owned by state-owned or state-affiliated agencies to 63.9 percent.
The high-speed rail operator in January failed to have its financial restructuring plan passed at the Legislative Yuan. It then modified the plan and is set to submit the revision for legislative review. Under the revision, the firm would first reduce the original investors’ capital by 60 percent to ensure that the company’s debts could be erased. The concession period, on the other hand, is to be extended by 35 years.
Meanwhile, the company has aimed to raise NT$30 billion (US$974.7 million) after reducing the capital, adding that NT$19.2 billion would be raised from the general public. The rest would be raised by state-affiliated agencies, small shareholders and THSRC employees.
Bureau of High Speed Rail first division director Yang Cheng-chun (楊正君) said that the ministry has discussed the new plan with legislators, who suggested a few changes on how to raise the capital.
He said that the two proposals were delivered under a few conditions, including dismissing the doubts that the company would be controlled by certain private corporations, ensuring that the government holds a majority of seats on the company’s board of directors and maintaining the management efficiency of a private corporation.
Of the two fundraising plans proposed by the ministry, Plan A allows state-run agencies to increase their investment in the firm by NT$18 billion.
The company’s employees would be able to invest NT$1.2 billion and the public could buy shares valued at NT$10.8 billion. Plan B would raise funds from state-run and state-affiliated agencies only.
In each, capital is to be raised through the High-Speed Rail Construction Fund, managed and owned by the ministry.
The public would be able to buy shares from the company if its financial situation has improved substantially, Yang said.
“We found that the two parties [Chinese Nationalist Party and Democratic Progressive Party] are more likely to agree with this option,” he added.
Yang said that Plan B would not turn THSRC into another state-run company, as state-run agencies would control just 48.9 percent of its shares.
“After the plan is executed, the company would be owned by the state, but it would be run by a private operator,” he said.
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